The Federal Reserve publicly solicits opinions on the new "Payment Account," and crypto startup banking regulation is gradually easing.

The Federal Reserve Board has issued a request for information, initiating the development of a new type of payment account that could benefit crypto companies seeking access to the Fed’s payment infrastructure without being subjected to excessive regulatory requirements. As the Office of the Comptroller of the Currency (OCC), Federal Deposit Insurance Corporation (FDIC), and the Federal Reserve jointly ease regulations, new crypto startup banks are gradually emerging and gaining more approval and support.

Federal Reserve Seeks Public Input on New “Payment Account”

Federal Reserve Board Governor Christopher Waller delivered an opening speech at the first “Payment Innovation Conference” in October, explicitly stating that the Fed should “embrace disruption,” and proposed exploring a new type of “payment account” called a “skinny master account.” This limited version of a master account is designed for payment innovators such as fintech firms, stablecoin issuers, and crypto companies, aiming to provide direct access to the Fed’s payment system without relying on third-party banks.

Payment accounts are fundamentally different from master accounts, which are used by financial institutions to access Fed payment services. The new payment account does not pay interest, cannot access Fed credit, and has a balance cap. Additionally, the payment account will not expand or otherwise alter the legal status of using Fed payment services.

The Fed will accept public comments for 45 days.

Gradual Deregulation of Crypto Startup Banks

Master accounts at the Fed are channels for financial institutions to connect directly to the central bank’s payment system. These accounts are difficult to obtain, which has been a challenge for some crypto companies. Custodia Bank and PayServices Bank have long sought this access but were repeatedly denied due to regulatory concerns, ultimately resorting to court battles. In both cases, federal agencies prevailed.

Federal Reserve Governor Christopher Waller stated in a release:

“These new payment accounts will support innovation while ensuring the safety of the payment system. This request for information is a critical first step in ensuring the Fed can respond to changes in payment methods.”

Wyoming Republican Senator Cynthia Lummis, a supporter of crypto, posted on X:

“Skinny master accounts will promote responsible innovation and make payments faster, cheaper, and safer.”

She also mentioned the end of “Operation Chokepoint 2.0,” a previous policy that restricted banking services for crypto companies, and praised the Fed’s move as “a significant step toward correcting past mistakes.”

The Office of the Comptroller of the Currency (OCC) recently conditionally approved six national trust bank charters related to crypto companies, including Erebor Bank, Circle, and Ripple subsidiaries. Erebor Bank was the first to receive deposit insurance approval from FDIC, marking a key advancement for crypto startup banks and providing greater security for investors.

(Crypto Bank Milestone: Erebor Bank Secures FDIC Deposit Insurance, Giving Investors Greater Confidence)

This article, “Federal Reserve Seeks Public Input on New ‘Payment Account,’ Crypto Startup Banks Gradually Deregulate,” first appeared on Chain News ABMedia.